Question
In: Finance
6 months ago you bought a $5 call option on a stock with an exercise price...
- 6 months ago you bought a $5 call option on a stock with an
exercise price of $60. What is the percentage return?
- If the stock price at expiration of this option is $54
- If the stock price at expiration of this option is $72
- 6 months ago you bought for $3 a put option on a stock with an
exercise price of $60, what is your return on investment?
- If the stock price at expiration of this option is $54
- If the stock price at expiration of this option is $72
Solutions
jeff jeffy answered 1 year agoRelated Solutions
You purchased a call option on IBM stock 3 months ago for a price (premium) of $1.
You purchased a call option on IBM stock 3 months ago for a
price (premium) of $1. The option has a 6-month expiration and a
strike price of $146. You decided to exercise the option today when
IBM stock is trading at $147. This means that _________________You sold an IBM stock today for $1.You bought an IBM stock today for $146.You bought an IBM stock today for $147.You sold an IBM stock today for $146.
1. A call option priced at $6 with a stock price of $45 and an exercise...
1. A call option priced at $6 with a stock price of $45
and an exercise price of $46 allows the holder to buy the stock
at
$46
$45
$52
$51
$40
2.A put option has a strike price of $75 and the cost of
the option is $6. If the current price of the stock is $73 then the
breakeven price for the option is:
$69
$75
$67
$81
$79
3. A call option has a strike price of...
You bought a call option on July 27, 2020 at the exercise price of $65. It...
You bought a call option on July 27,
2020 at the exercise price of $65. It expires on October 26, 2020.
The stock currently sells for $66., while the call option sells for
$6.
a) What is the intrinsic value of the
call? What is the time premium paid for the call?
b) What will the value of this call be
after expiration if the price of the stock is $99, $65, $99, and
$80, respectively?
c) If the price...
You bought a call option on July 27, 2020 at the exercise price of $65. It...
You bought a call option on July 27, 2020 at the exercise price
of $65. It expires on October 26, 2020. The stock currently sells
for $66., while the call option sells for $6.
a) What is the intrinsic value of the call? What is the time
premium paid for the call?
b) What will the value of this call be after expiration if the
price of the stock is $99, $65, $99, and $80, respectively?
c) If the price...
3. Suppose you bought a call option for $3 with an exercise price of $50 and...
3. Suppose you bought a call option for $3 with an exercise
price of $50 and another call option for $2 with an exercise price
of $60 per share. Draw a graph of the payout on the investment as a
function of the stock price. Label the graph.
(i). You bought a call option on July 27, 2020 at the exercise price of $65....
(i). You bought a call
option on July 27, 2020 at the exercise price of $65. It expires on
October 26, 2020. The stock currently sells for $66., while the
call option sells for $6.
a) What is the intrinsic value of the
call? What is the time premium paid for the call?
b) What will the value of this call be
after expiration if the price of the stock is $99, $65, $99, and
$80, respectively?
c) If the...
(i). You bought a call option on July 27, 2020 at the exercise price of $65....
(i). You bought a call
option on July 27, 2020 at the exercise price of $65. It expires on
October 26, 2020. The stock currently sells for $66., while the
call option sells for $6.
a) What is the intrinsic value of the
call? What is the time premium paid for the call?
b) What will the value of this call be
after expiration if the price of the stock is $99, $65, $99, and
$80, respectively?
c) If the...
A call option with an exercise price of $25 and four months to expiration has a...
A call option with an exercise price of $25 and four months to
expiration has a price of $2.75. The stock is currently priced at
$23.80, and the risk-free rate is 2.5 percent per year, compounded
continuously.
What is the price of a put option with the same exercise
price?
You have written a call option on Walmart common stock. The option has an exercise price...
You have written a call option on Walmart common stock. The
option has an exercise price of $88, and Walmart’s stock currently
trades at $86. The option premium is $1.30 per contract. a. How
much of the option premium is due to intrinsic value versus time
value? b. What is your net profit if Walmart’s stock price
decreases to $84 and stays there until the option expires? c. What
is your net profit on the option if Walmart’s stock price...
You have written a call option on Walmart common stock. The option has an exercise price...
You have written a call option on Walmart common stock. The
option has an exercise price of $77, and Walmart’s stock currently
trades at $75. The option premium is $1.40 per contract.
a. How much of the option premium is due to
intrinsic value versus time value?
b. What is your net profit if Walmart’s stock
price decreases to $73 and stays there until the option
expires?
c. What is your net profit on the option if
Walmart’s stock price...
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